ADP Earnings: HCM Powerhouse Remains Unimpeded by Macroeconomic Headwinds

On a day defined by disappointing GDP and jobs numbers, wide-moat ADP's impressive third-quarter results released April 30, 2025, have gone largely unnoticed. The company achieved sales growth and margins above consensus expectations as client funds grew faster than anticipated, resulting in higher levels of interest income. Additionally, the company's Professional Employer Organization, or PEO, continues to benefit from secular tailwinds resulting in high-single-digit year-over-year growth. Despite some of the macroeconomic uncertainty, we are slightly increasing our sales and margin forecasts and raising our fair value estimate to $294 per share from $290 per share.